Mumbai, July 17: The rupee appreciated 12 paise to settle at 96.30 against the US dollar on Friday supported by positive domestic markets and a decline in the US treasury yields.
Forex traders said elevated tensions in West Asia, which pushed up global oil prices, maintained pressure on the local unit; however, a possible intervention by the Reserve Bank of India supported the rupee at lower levels.
In the interbank foreign exchange market, the rupee opened at 96.35 against the greenback and traded in a narrow range of 96.26-96.41. Eventually it settled at 96.30, up 12 paise from its previous close.
On Thursday, the rupee had settled at 96.42 against the US dollar.
The US expanded its airstrike campaign against Iran early on Friday by increasingly hitting bridges, part of President Donald Trump’s threats to start striking infrastructure to pressure Tehran to ease its chokehold on the Strait of Hormuz. Iran launched new missile attacks against US-allied nations in West Asia and warned that its attacks would escalate.
According to V K Vijayakumar, Chief Investment Strategist, Geojit Investments, the rally in the rupee was led by the sharp surge in the Indian equity market with the Nifty rising by 261 points.
“The weakness in the chip trade is expected to be positive for India. Rupee has the potential to appreciate further,” Vijayakumar said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally down by 0.02 per cent at 100.74.
Brent crude, the global oil benchmark, was trading 2.30 per cent higher at USD 86.17 per barrel in futures trade.
Foreign Institutional Investors offloaded equities worth Rs 376.41 crore on a net basis on Friday, according to exchange data.
On the domestic macroeconomic front, India’s forex reserves jumped USD 964 million to USD 675.157 billion in the week ended July 10, the Reserve Bank said on Friday.
In the previous reporting week, the overall kitty had jumped by USD 7.26 billion to USD 674.193 billion. (PTI)
